Consumer Complaint Handling as a Strategic Marketing Tool

Abstract

Effective complaint‐handling by an organization can result in such benefits as consumer satisfaction, company / brand loyalty, favorable word‐of‐mouth publicity and decreased litigation. Therefore, organizations should consider the application of strategic marketing concepts when establishing complaint‐handling policies. Alternative strategies are proposed and a model for formulating a complaint‐handling strategy is described.

Customer complaints and organizational responses: the effects of complainants’ perceptions of justice on satisfaction and loyalty

“…Since service companies may not be able to prevent all complaints, they can learn to find effective solutions to them. It has been shown that effective complaint handling may convert aggrieved customers into satisfied and loyal ones (Gilly and Hansen, 1992). In addition, successful service firms such as Ritz-Carlton and Federal Express desire to provide ''just'' resolutions in their complaint handling practices (Tax et al, 1998, p. 60).…”

What money can’t buy: The psychology of financial overcompensation

“…In these cases, victims receive a compensation that is greater than the damage they suffered, which results in a more favorable outcome for the victim than the perpetrator, and thus signals self-sacrifice from this perpetrator (see De Cremer & Van Knippenberg, 2002, 2004. Such overcompensation occurs in real-life, for example in the context of customer service complaints when companies provide additional compensation that goes beyond mere failure restoration (e.g., in the form of a refund, a coupon, or a product replacement that is worth more than the damage suffered), in order to increase postcomplaint satisfaction (Boshoff, 1997;Estelami, 2000;Estelami & De Maeyer, 2002;Gilly & Hansen, 1985). Or, in case of hotel overbooking, when a customer is offered the finest suite of the hotel, a voucher, or a cash-based overcompensation (Noone & Lee, 2011).…”

On the Psychology of Financial Compensations to Restore Fairness Transgressions: When Intentions Determine Value

“…In studying victim's responses to service failures, several authors observed that overcompensation of the harm done resulted in more consumer satisfaction than exact or partial compensation (Boshoff, 1997;Davidow, 2003;Gilly and Hansen, 1985;Webster and Sundaram, 1998). Moreover, recent findings in the context of economic exchange relations have shown that the size of a compensation can also have an influence on the degree to which a victim's trust is restored and to what degree victims are willing to continue interacting with the transgressor.…”